The best and worst markets for house flippers

Flippers nationwide bought at average 8% below and sold at 6% above

In the second quarter on average flippers bought properties for an 8% discount below their estimated market value (via automated valuation model) and re-sold them at an average 6% premium above their estimated market value, according to RealtyTrac.

The report shows that in the best markets for flipping, properties being flipped were all purchased at double-digit discounts below market value, and in most cases sold at a premium above market value.

There is one exception: the Chattanooga, Tennessee, market where flippers sold the flipped properties at a discount, but they still made a hefty profit on average because the discount they purchased at was so much more than the discount they sold for.

Home price appreciation helped out the flippers in almost all of the best markets as well as the worst markets, comparing AVM at purchase to AVM at eventual sale.

But the difference is that in the best markets the flippers were more successfully able to buy below market value and also evidently add value and therefore sell at a significant premium in most cases.

RealtyTrac offers this nifty heat map.

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For a list of the best and worst markets for flipping, based on return on investment, click the image below.

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Trey Garrison was a Senior Financial Reporter for HousingWire.com. Trey served as real estate editor for the Dallas Business Journal, and was one of the founding editors of D CEO Magazine. He has been an editor for D Magazine — considered among the best city magazines in the United States — and a contributor for Reason magazine.

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